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Friday, July 19, 2024  
12 Muharram 1446  

Budget 2024-25: Sindh increases GST on services

Three additional sectors have been included under the GST on services
A penalty of up to Rs1 million has been imposed on businesses that fail to install an e-invoicing system. Reuters/File
A penalty of up to Rs1 million has been imposed on businesses that fail to install an e-invoicing system. Reuters/File

The Sindh government has increased the rate of services GST from 13% to 15% in the new financial year 2024-25 and has also expanded the scope of GST on services to several new sectors.

Under the Sindh Sales Tax on Services Act, GST is already being collected on services provided by restaurants, hotels, wedding halls, management services, airport services, and warehouses, among others. This tax was previously being collected at a rate of 13%.

But Sindh Chief Minister Syed Murad Ali Shah announced during the presentation of the provincial budget on Friday that the rate of GST on services is being increased to 15%.

According to the Sindh Finance Bill, three additional sectors have been included under the GST on services, which are: educational services, hospital and clinic services, and services provided by pet-related establishments.

The existing list has also been amended to include farmhouses along with guest houses. Similarly, the category of professional services has been expanded to include medical practitioners and consultants, meaning their services will also be subject to GST on services.

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The Act has been amended to include all kinds of sports services, which were previously only applicable to indoor sports and game centres.

A penalty of up to Rs1 million has been proposed for businesses that fail to install an e-invoicing system, and in case of a second offence, the business will be sealed.

Individuals who delay in depositing the Sales Tax on Services will be required to pay an additional amount equal to the unpaid tax or Rs100,000, whichever is higher.

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